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Tuesday, September 16, 2008

The Collapse

We usually hear that when Wall Street sneezes, the whole world catches a cold. So, what happens when Wall Street catches flu?

Last weekend Lehman Brothers, the fourth biggest US investment bank, filed for bankruptcy after it suffered an estimated $60 billion in bad real estate holdings. Then, Bank of America took over Merrill Lynch, the largest U.S. brokerage, for $50 billion. The fall of what was dubbed as “two of America’s most iconic investment houses” sent not just chills but convulsions throughout the world. Some financial planners downplay it as “just another panic Monday.” ABC News’ financial contributor Mellody Hobson said, “If you’re in the financial industry, there’s no question, it’s Armageddon, it’s a history-making day. [But] if you’re a regular individual, you should rest assured that 98 percent of banks in [the USA] are totally and completely sound. There’s nothing to worry about in terms of your individual account.” (Source: http://abcnews.go.com/) Time called it “bad but no chaos.” Others however say the worst is yet to come. What caused the collapse? It did not happen overnight. Among other factors, it is a result of moral erosion. Frank Vogl, co-founder of Transparency International (a global coalition against corruption), said, “When so many people engaged in so many aspects of finance have lost their ethical compass and put their short-term personal gains above other considerations, [it can have] a profound macroeconomic impact.” (http://www.transparency.org/) Another analyst put it this way, “Their cause, at least partly, has been dishonesty, greed, and weak business ethics.”

Thus, it’s time for business to review its moral moorings. More than saying prayers before a board meeting and more than allowing Bible studies for employees in a company, corporate people must allow the word of God to transform their business ethics and practices like paying the right taxes and wages, providing excellent service and keeping only one book. “Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ.” (Colossians 3:23-24, ESV)